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Home Publications Blogs Beat the Press Pharmaceutical Industry Funded Study Shows that Unauthorized Drug Copies Save Tens of Millions

Pharmaceutical Industry Funded Study Shows that Unauthorized Drug Copies Save Tens of Millions

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Sunday, 12 September 2010 10:17

This is the clear implication of a new industry funded study, even if USA Today essentially ran an ad for the pharmaceutical industry by headlining its piece: "growing problem of fake drugs endangers consumers' health." The article highlighted the fact that unauthorized copies of drugs sometimes do not meet the same standards as the official version, but also notes that: "counterfeiters are now able to fake drugs so well that even experts find it hard to distinguish the copies from the real deal." This implies that often the unauthorized versions will be every bit as good as the brand drugs.

According to the article, the study finds that the unauthorized drug market is between $75 billion and $200 billion a year, but adds: "the market is likely much bigger because many cases are hard to detect." If we assume an average prescription price of $2 (many of these drugs are sold in the developing world), then this implies that the unauthorized market involves sales of 37 billion to 100 billion prescriptions year. If 1 in 1000 of these prescriptions save a life (because the patient could not afford the authorized version), then unauthorized drugs save between 37 million and 100 people a year.

In an act of unbelievable sloppiness this article fails to distinguish between unauthorized copies, where the buyer knows that they are not getting the brand drug and genuine counterfeits, where the buyer is deceived about the drug they are buying. It also would have been helpful to include a discussion of alternatives to patent support for prescription drug research. Government imposed patent monopolies are the root cause of the high prices that create a huge market for unauthorized copies of drugs.

Comments (7)Add Comment
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written by izzatzo, September 12, 2010 1:02
In an act of unbelievable sloppiness this article fails to distinguish between unauthorized copies, where the buyer knows that they are not getting the brand drug and genuine counterfeits, where the buyer is deceived about the drug they are buying.


One time when I was a musician I used to sell identical music on CDs in four versions: Authorized copies, unauthorized copies, genuine counterfeits and fake counterfeits.

Then one day a fan got wise and bought one of each version and sued me for stealing all the consumer surplus under the demand curve.
i wouldn't let my dog eat a chinese drug... or food
written by frankenduf, September 13, 2010 9:21
there is a legitimate ambivalence here- the problem with drug manufacturing in third world countries is that it's the wild west- with no sheriff, unscrupulous manufacturing could end up putting toothpaste in dogfood, or dogfood in toothpaste, or 'filler' in heparin- while i utterly agree that freedom of manufacturing benefits the sick masses, i personally would never (knowingly) take a chinese drug, by virtue of the fact that i am wealthy enough to avoid it
Where do you think drugs are made, anyway?
written by Cassandra, September 13, 2010 10:19
Believing that "legitimate" drugs, particularly generics, are made under haz-mat laboratory conditions with careful measurements of active and inactive ingredients is like believing in the tooth fairy.

Most U.S. drugs are made outside the U.S., mostly in China. Their factories aren't subject to the stringent standards of the F.D.A.
Too many distinctions spoil the point
written by Tom Shillock, September 13, 2010 11:48
"One time ... I used to sell identical music on CDs in four versions: Authorized copies, unauthorized copies, genuine counterfeits and fake counterfeits."

What is a "fake counterfeit"? 'Counterfeit' simply means not licensed or authorized. 'Fake' means the drug will not deliver it's intended benefit because it was made do deceive with regard to its value.

The USA Today article provides no link to a WHO study to back up the claims. The WHO site seems to provide a 'fact sheet' dated 2010 which does not itself reference a study to back up the claims it contains. That is unfortunate because there are important concerns in this area but they are being distorted by vested interests in different organizations.
...
written by diesel, September 13, 2010 8:41
While not exactly on topic, there's a good book review on containing health care costs and the recent legislation @ New York Review of Books. It seems relevant to discussions that have taken place here in the past. http://www.nybooks.com/article...tion=false
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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